As filed with the Securities and Exchange Commission on September 3, 2019
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM N-CSR
CERTIFIED SHAREHOLDER REPORT OF
REGISTERED MANAGEMENT INVESTMENT COMPANIES
Investment Company Act file number:811-23227
SYNTAX ETF TRUST
(Exact Name of Registrant as Specified in Charter)
110 East 59th Street, 31st Floor
New York, NY 10022
(Address of Principal Executive Offices) (Zip Code)
Registrant’s Telephone Number, including Area Code:(212) 883-2290
Kathy Cuocolo, 110 East 59th Street, 31st Floor New York, NY 10022
(Name and Address of Agent for Service)
Copies to:
Kathleen H. Moriarty
Counsel to the Trust
Chapman & Cutler LLP
1270 Avenue of the Americas, 30th Floor
New York, New York 10020
Date of fiscal year end:December 31
Date of reporting period:June 30, 2019
| Item 1: | Report(s) to Shareholders. |
The Semi-Annual Report is attached.
SEMI-ANNUAL REPORT
Syntax Stratified LargeCap ETF
June 30, 2019
Beginning on January 1, 2021, as permitted by regulations adopted by the U.S. Securities and Exchange Commission, paper copies of a Fund’s annual and semi-annual shareholder reports will no longer be sent by mail, unless you specifically request paper copies of the reports from the Fund (or from your financial intermediary, such as a broker-dealer or bank). Instead, the reports will be made available on the Fund’s website (www.syntaxadvisors.com), and you will be notified by mail each time a report is posted, and provided with a website link to access the report. If you already elected to receive reports electronically, you will not be affected by this change and you need not take any action. You may elect to receive shareholder reports and other communications by contacting your financial intermediary.
You may elect to receive all future reports in paper free of charge. If you invest through a financial intermediary, you can contact your financial intermediary to request that you continue to receive paper copies of your shareholder reports. Your election to receive reports in paper will apply to all funds held in your account.
Syntax Stratified LargeCap ETF
Semi-Annual Report
June 30, 2019
(Unaudited)
Table of Contents
This report is not authorized for distribution to prospective investors in the Fund unless preceded or accompanied by an effective prospectus.
Syntax Stratified LargeCap ETF
Schedule of Investments
June 30, 2019 (Unaudited)
| Security Description | Shares | Value |
| COMMON STOCK—99.8% | | |
3M Co.
| 388 | $67,256 |
Abbott Laboratories
| 2,098 | 176,442 |
AbbVie, Inc.
| 822 | 59,776 |
ABIOMED, Inc.(a)
| 172 | 44,804 |
Accenture PLC, Class A
| 466 | 86,103 |
Activision Blizzard, Inc.
| 3,782 | 178,510 |
Adobe, Inc.(a)
| 839 | 247,211 |
Advance Auto Parts, Inc.
| 511 | 78,766 |
Advanced Micro Devices, Inc.(a)
| 1,894 | 57,521 |
AES Corp.
| 10,093 | 169,159 |
Affiliated Managers Group, Inc.
| 651 | 59,983 |
Aflac, Inc.
| 1,567 | 85,887 |
Agilent Technologies, Inc.
| 1,233 | 92,068 |
Air Products & Chemicals, Inc.
| 118 | 26,712 |
Akamai Technologies, Inc.(a)
| 1,646 | 131,910 |
Alaska Air Group, Inc.
| 1,230 | 78,609 |
Albemarle Corp.
| 365 | 25,700 |
Alexandria Real Estate Equities, Inc., REIT
| 228 | 32,169 |
Alexion Pharmaceuticals, Inc.(a)
| 549 | 71,908 |
Align Technology, Inc.(a)
| 282 | 77,183 |
Allegion PLC
| 1,220 | 134,871 |
Allergan PLC
| 558 | 93,426 |
Alliance Data Systems Corp.
| 617 | 86,460 |
Alliant Energy Corp.
| 941 | 46,184 |
Allstate Corp.
| 1,266 | 128,740 |
Alphabet, Inc., Class A(a)
| 30 | 32,484 |
Alphabet, Inc., Class C(a)
| 30 | 32,427 |
Altria Group, Inc.
| 3,818 | 180,782 |
Amazon.com, Inc.(a)
| 23 | 43,553 |
Amcor PLC
| 3,945 | 45,328 |
Ameren Corp.
| 613 | 46,042 |
American Airlines Group, Inc.
| 2,375 | 77,449 |
American Electric Power Co., Inc.
| 714 | 62,839 |
American Express Co.
| 236 | 29,132 |
American International Group, Inc.
| 1,213 | 64,629 |
American Tower Corp. REIT
| 163 | 33,325 |
American Water Works Co., Inc.
| 1,094 | 126,904 |
Ameriprise Financial, Inc.
| 374 | 54,290 |
AmerisourceBergen Corp.
| 1,521 | 129,680 |
AMETEK, Inc.
| 761 | 69,129 |
Amgen, Inc.
| 367 | 67,631 |
Amphenol Corp., Class A
| 1,029 | 98,722 |
Anadarko Petroleum Corp.
| 556 | 39,231 |
Analog Devices, Inc.
| 1,658 | 187,138 |
ANSYS, Inc.(a)
| 1,750 | 358,435 |
Anthem, Inc.
| 484 | 136,590 |
AO Smith Corp.
| 1,421 | 67,014 |
Aon PLC
| 129 | 24,894 |
Apache Corp.
| 1,412 | 40,906 |
Apartment Investment & Management Co. REIT, Class A
| 1,265 | 63,402 |
| Security Description | Shares | Value |
Apple, Inc.
| 895 | $177,138 |
Applied Materials, Inc.
| 2,789 | 125,254 |
Aptiv PLC
| 2,577 | 208,299 |
Archer-Daniels-Midland Co.
| 6,348 | 258,998 |
Arconic, Inc.
| 1,877 | 48,464 |
Arista Networks, Inc.(a)
| 438 | 113,714 |
Arthur J Gallagher & Co.
| 281 | 24,613 |
Assurant, Inc.
| 610 | 64,892 |
AT&T, Inc.
| 5,331 | 178,642 |
Atmos Energy Corp.
| 1,232 | 130,050 |
Autodesk, Inc.(a)
| 2,181 | 355,285 |
Automatic Data Processing, Inc.
| 521 | 86,137 |
AutoZone, Inc.(a)
| 69 | 75,863 |
AvalonBay Communities, Inc., REIT
| 311 | 63,189 |
Avery Dennison Corp.
| 1,172 | 135,577 |
Baker Hughes a GE Co.
| 8,765 | 215,882 |
Ball Corp.
| 659 | 46,123 |
Bank of America Corp.
| 3,076 | 89,204 |
Bank of New York Mellon Corp.
| 1,454 | 64,194 |
Baxter International, Inc.
| 2,214 | 181,327 |
BB&T Corp.
| 689 | 33,851 |
Becton Dickinson and Co.
| 184 | 46,370 |
Berkshire Hathaway, Inc., Class B(a)
| 841 | 179,276 |
Best Buy Co., Inc.
| 1,959 | 136,601 |
Biogen, Inc.(a)
| 284 | 66,419 |
BlackRock, Inc.
| 129 | 60,540 |
Boeing Co.
| 248 | 90,274 |
Booking Holdings, Inc.(a)
| 24 | 44,993 |
BorgWarner, Inc.
| 4,741 | 199,027 |
Boston Properties, Inc., REIT
| 255 | 32,895 |
Boston Scientific Corp.(a)
| 1,067 | 45,860 |
Bristol-Myers Squibb Co.
| 1,360 | 61,676 |
Broadcom, Inc.
| 432 | 124,356 |
Broadridge Financial Solutions, Inc.
| 497 | 63,457 |
Brown-Forman Corp., Class B
| 2,299 | 127,434 |
Cabot Oil & Gas Corp.
| 4,082 | 93,723 |
Cadence Design Systems, Inc.(a)
| 2,547 | 180,353 |
Campbell Soup Co.
| 2,624 | 105,144 |
Capital One Financial Corp.
| 952 | 86,384 |
Capri Holdings Ltd.(a)
| 3,090 | 107,161 |
Cardinal Health, Inc.
| 2,931 | 138,050 |
CarMax, Inc.(a)
| 928 | 80,578 |
Carnival Corp. PLC
| 1,082 | 50,367 |
Caterpillar, Inc.
| 678 | 92,405 |
Cboe Global Markets, Inc.
| 400 | 41,452 |
CBRE Group, Inc., REIT, Class A(a)
| 497 | 25,496 |
CBS Corp., Class B, NVDR
| 1,761 | 87,874 |
Celanese Corp.
| 1,242 | 133,888 |
Celgene Corp.(a)
| 670 | 61,935 |
Centene Corp.(a)
| 2,576 | 135,085 |
CenterPoint Energy, Inc.
| 5,824 | 166,741 |
CenturyLink, Inc.
| 15,539 | 182,739 |
See accompanying notes to financial statements.
1
Syntax Stratified LargeCap ETF
Schedule of Investments (continued)
June 30, 2019 (Unaudited)
| Security Description | Shares | Value |
Cerner Corp.
| 1,593 | $116,767 |
CF Industries Holdings, Inc.
| 703 | 32,837 |
CH Robinson Worldwide, Inc.
| 515 | 43,440 |
Charles Schwab Corp.
| 1,402 | 56,346 |
Charter Communications, Inc., Class A(a)
| 440 | 173,879 |
Chevron Corp.
| 3,212 | 399,701 |
Chipotle Mexican Grill, Inc.(a)
| 349 | 255,775 |
Chubb Ltd.
| 1,148 | 169,089 |
Church & Dwight Co., Inc.
| 2,874 | 209,974 |
Cigna Corp.
| 871 | 137,226 |
Cimarex Energy Co.
| 1,777 | 105,429 |
Cincinnati Financial Corp.
| 1,666 | 172,714 |
Cintas Corp.
| 410 | 97,289 |
Cisco Systems, Inc.
| 1,891 | 103,494 |
Citigroup, Inc.
| 1,278 | 89,498 |
Citizens Financial Group, Inc.
| 986 | 34,865 |
Citrix Systems, Inc.
| 1,188 | 116,590 |
Clorox Co.
| 1,414 | 216,498 |
CME Group, Inc.
| 219 | 42,510 |
CMS Energy Corp.
| 801 | 46,386 |
Coca-Cola Co.
| 3,782 | 192,579 |
Cognizant Technology Solutions Corp., Class A
| 2,099 | 133,056 |
Colgate-Palmolive Co.
| 3,023 | 216,658 |
Comcast Corp., Class A
| 4,077 | 172,376 |
Comerica, Inc.
| 1,638 | 118,984 |
Conagra Brands, Inc.
| 3,711 | 98,416 |
Concho Resources, Inc.
| 394 | 40,653 |
ConocoPhillips
| 660 | 40,260 |
Consolidated Edison, Inc.
| 1,948 | 170,801 |
Constellation Brands, Inc., Class A
| 690 | 135,889 |
Cooper Companies, Inc.
| 267 | 89,950 |
Copart, Inc.(a)
| 584 | 43,648 |
Corning, Inc.
| 3,139 | 104,309 |
Corteva, Inc.
| 1,284 | 37,968 |
Costco Wholesale Corp.
| 1,492 | 394,276 |
Coty, Inc., Class A
| 16,337 | 218,916 |
Crown Castle International Corp. REIT
| 259 | 33,761 |
CSX Corp.
| 419 | 32,418 |
Cummins, Inc.
| 263 | 45,062 |
CVS Health Corp.
| 6,368 | 346,992 |
Danaher Corp.
| 463 | 66,172 |
Darden Restaurants, Inc.
| 2,162 | 263,180 |
DaVita, Inc.(a)
| 1,176 | 66,162 |
Deere & Co.
| 569 | 94,289 |
Delta Air Lines, Inc.
| 1,386 | 78,656 |
DENTSPLY SIRONA, Inc.
| 760 | 44,354 |
Devon Energy Corp.
| 3,766 | 107,406 |
Diamondback Energy, Inc.
| 392 | 42,716 |
Digital Realty Trust, Inc., REIT
| 1,080 | 127,213 |
Discover Financial Services
| 1,113 | 86,358 |
Discovery, Inc., Class A(a)
| 1,486 | 45,620 |
| Security Description | Shares | Value |
Discovery, Inc., Class C(a)
| 1,607 | $45,719 |
DISH Network Corp., Class A(a)
| 4,595 | 176,494 |
Dollar General Corp.
| 636 | 85,962 |
Dollar Tree, Inc.(a)
| 781 | 83,872 |
Dominion Energy, Inc.
| 844 | 65,258 |
Dover Corp.
| 673 | 67,435 |
Dow, Inc.
| 843 | 41,568 |
DR Horton, Inc.
| 3,751 | 161,781 |
DTE Energy Co.
| 499 | 63,812 |
Duke Energy Corp.
| 535 | 47,208 |
Duke Realty Corp. REIT
| 1,087 | 34,360 |
DuPont de Nemours, Inc.
| 575 | 43,165 |
DXC Technology Co.
| 2,501 | 137,930 |
E*TRADE Financial Corp.
| 544 | 24,262 |
Eastman Chemical Co.
| 359 | 27,941 |
Eaton Corp. PLC
| 1,238 | 103,101 |
eBay, Inc.
| 1,108 | 43,766 |
Ecolab, Inc.
| 217 | 42,844 |
Edison International
| 2,902 | 195,624 |
Edwards Lifesciences Corp.(a)
| 234 | 43,229 |
Electronic Arts, Inc.(a)
| 1,860 | 188,344 |
Eli Lilly & Co.
| 579 | 64,147 |
Emerson Electric Co.
| 343 | 22,885 |
Entergy Corp.
| 634 | 65,258 |
EOG Resources, Inc.
| 456 | 42,481 |
Equifax, Inc.
| 392 | 53,014 |
Equinix, Inc., REIT
| 254 | 128,090 |
Equity Residential, REIT
| 827 | 62,786 |
Essex Property Trust, Inc., REIT
| 216 | 63,057 |
Estee Lauder Companies, Inc., Class A
| 1,254 | 229,620 |
Everest Re Group Ltd.
| 258 | 63,772 |
Evergy, Inc.
| 775 | 46,616 |
Eversource Energy
| 608 | 46,062 |
Exelon Corp.
| 3,396 | 162,804 |
Expedia Group, Inc.
| 340 | 45,230 |
Expeditors International of Washington, Inc.
| 583 | 44,226 |
Extra Space Storage, Inc., REIT
| 599 | 63,554 |
Exxon Mobil Corp.
| 5,220 | 400,009 |
F5 Networks, Inc.(a)
| 756 | 110,096 |
Facebook, Inc., Class A(a)
| 357 | 68,901 |
Fastenal Co.
| 2,453 | 79,943 |
Federal Realty Investment Trust, REIT
| 216 | 27,812 |
FedEx Corp.
| 393 | 64,527 |
Fidelity National Information Services, Inc.
| 355 | 43,551 |
Fifth Third Bancorp
| 1,260 | 35,154 |
First Republic Bank
| 1,193 | 116,496 |
FirstEnergy Corp.
| 1,471 | 62,974 |
Fiserv, Inc.(a)
| 483 | 44,030 |
FleetCor Technologies, Inc.(a)
| 105 | 29,489 |
FLIR Systems, Inc.
| 2,531 | 136,927 |
Flowserve Corp.
| 1,769 | 93,209 |
FMC Corp.
| 405 | 33,595 |
See accompanying notes to financial statements.
2
Syntax Stratified LargeCap ETF
Schedule of Investments (continued)
June 30, 2019 (Unaudited)
| Security Description | Shares | Value |
Foot Locker, Inc.
| 2,000 | $83,840 |
Ford Motor Co.
| 12,955 | 132,530 |
Fortinet, Inc.(a)
| 1,366 | 104,950 |
Fortive Corp.
| 279 | 22,744 |
Fortune Brands Home & Security, Inc.
| 1,197 | 68,385 |
Fox Corp., Class A, Class A
| 1,224 | 44,847 |
Fox Corp., Class B, Class B
| 1,234 | 45,078 |
Franklin Resources, Inc.
| 1,723 | 59,960 |
Freeport-McMoRan, Inc.
| 16,197 | 188,047 |
Gap, Inc.
| 3,558 | 63,937 |
Garmin Ltd.
| 2,162 | 172,528 |
Gartner, Inc.(a)
| 816 | 131,327 |
General Dynamics Corp.
| 504 | 91,637 |
General Electric Co.
| 6,323 | 66,392 |
General Mills, Inc.
| 2,076 | 109,032 |
General Motors Co.
| 3,628 | 139,787 |
Genuine Parts Co.
| 754 | 78,099 |
Gilead Sciences, Inc.
| 975 | 65,871 |
Global Payments, Inc.
| 181 | 28,984 |
Goldman Sachs Group, Inc.
| 900 | 184,140 |
H&R Block, Inc.
| 2,255 | 66,072 |
Halliburton Co.
| 4,541 | 103,262 |
Hanesbrands, Inc.
| 7,803 | 134,368 |
Harley-Davidson, Inc.
| 3,735 | 133,825 |
Hartford Financial Services Group, Inc.
| 1,177 | 65,582 |
Hasbro, Inc.
| 903 | 95,429 |
HCA Healthcare, Inc.
| 908 | 122,734 |
HCP, Inc., REIT
| 1,790 | 57,244 |
Helmerich & Payne, Inc.
| 2,005 | 101,493 |
Henry Schein, Inc.(a)
| 1,815 | 126,868 |
Hershey Co.
| 701 | 93,955 |
Hess Corp.
| 678 | 43,100 |
Hewlett Packard Enterprise Co.
| 9,141 | 136,658 |
Hilton Worldwide Holdings, Inc.
| 615 | 60,110 |
HollyFrontier Corp.
| 4,812 | 222,699 |
Hologic, Inc.(a)
| 2,704 | 129,846 |
Home Depot, Inc.
| 629 | 130,813 |
Honeywell International, Inc.
| 374 | 65,297 |
Hormel Foods Corp.
| 6,245 | 253,172 |
Host Hotels & Resorts, Inc., REIT
| 3,139 | 57,193 |
HP, Inc.
| 12,994 | 270,145 |
Humana, Inc.
| 548 | 145,384 |
Huntington Bancshares, Inc.
| 2,582 | 35,683 |
Huntington Ingalls Industries, Inc.
| 301 | 67,647 |
IDEXX Laboratories, Inc.(a)
| 483 | 132,984 |
IHS Markit Ltd.(a)
| 1,454 | 92,649 |
Illinois Tool Works, Inc.
| 434 | 65,452 |
Illumina, Inc.(a)
| 251 | 92,406 |
Incyte Corp.(a)
| 833 | 70,772 |
Ingersoll-Rand PLC
| 346 | 43,828 |
Intel Corp.
| 1,245 | 59,598 |
Intercontinental Exchange, Inc.
| 508 | 43,658 |
| Security Description | Shares | Value |
International Business Machines Corp.
| 957 | $131,970 |
International Flavors & Fragrances, Inc.
| 174 | 25,246 |
International Paper Co.
| 1,003 | 43,450 |
Interpublic Group of Companies, Inc.
| 3,904 | 88,191 |
Intuit, Inc.
| 453 | 118,382 |
Intuitive Surgical, Inc.(a)
| 87 | 45,636 |
Invesco Ltd.
| 2,786 | 57,002 |
IPG Photonics Corp.(a)
| 163 | 25,143 |
IQVIA Holdings, Inc.(a)
| 610 | 98,149 |
Iron Mountain, Inc., REIT
| 1,087 | 34,023 |
Jack Henry & Associates, Inc.
| 313 | 41,917 |
Jacobs Engineering Group, Inc.
| 2,478 | 209,118 |
JB Hunt Transport Services, Inc.
| 475 | 43,420 |
Jefferies Financial Group, Inc.
| 9,591 | 184,435 |
JM Smucker Co.
| 899 | 103,556 |
Johnson & Johnson
| 1,231 | 171,454 |
Johnson Controls International PLC
| 1,619 | 66,881 |
JPMorgan Chase & Co.
| 785 | 87,763 |
Juniper Networks, Inc.
| 3,886 | 103,484 |
Kansas City Southern
| 277 | 33,744 |
Kellogg Co.
| 1,712 | 91,712 |
KeyCorp.
| 2,012 | 35,713 |
Keysight Technologies, Inc.(a)
| 257 | 23,081 |
Kimberly-Clark Corp.
| 1,611 | 214,714 |
Kimco Realty Corp. REIT
| 1,535 | 28,367 |
Kinder Morgan, Inc.
| 8,398 | 175,350 |
KLA-Tencor Corp.
| 1,048 | 123,874 |
Kohl's Corp.
| 1,806 | 85,875 |
Kraft Heinz Co.
| 3,659 | 113,575 |
Kroger Co.
| 15,994 | 347,230 |
L Brands, Inc.
| 2,874 | 75,011 |
L3Harries Technologies, Inc.
| 679 | 128,419 |
Laboratory Corp. of America Holdings(a)
| 346 | 59,823 |
Lam Research Corp.
| 650 | 122,096 |
Lamb Weston Holdings, Inc.
| 1,796 | 113,795 |
Leggett & Platt, Inc.
| 1,730 | 66,380 |
Lennar Corp., Class A
| 3,219 | 155,993 |
Lincoln National Corp.
| 1,359 | 87,588 |
Linde PLC
| 128 | 25,702 |
LKQ Corp.(a)
| 2,959 | 78,739 |
Lockheed Martin Corp.
| 185 | 67,255 |
Loews Corp.
| 3,222 | 176,147 |
Lowe's Cos, Inc.
| 1,298 | 130,981 |
LyondellBasell Industries N.V., Class A
| 499 | 42,979 |
M&T Bank Corp.
| 205 | 34,864 |
Macerich Co. REIT
| 833 | 27,897 |
Macy's, Inc.
| 3,999 | 85,819 |
Marathon Oil Corp.
| 2,989 | 42,474 |
Marathon Petroleum Corp.
| 4,045 | 226,035 |
MarketAxess Holdings, Inc.
| 405 | 130,175 |
Marriott International, Inc., Class A
| 430 | 60,325 |
Marsh & McLennan Companies, Inc.
| 251 | 25,037 |
See accompanying notes to financial statements.
3
Syntax Stratified LargeCap ETF
Schedule of Investments (continued)
June 30, 2019 (Unaudited)
| Security Description | Shares | Value |
Martin Marietta Materials, Inc.
| 385 | $88,592 |
Masco Corp.
| 1,689 | 66,276 |
Mastercard, Inc., Class A
| 111 | 29,363 |
Maxim Integrated Products, Inc.
| 3,078 | 184,126 |
McCormick & Co., Inc.
| 708 | 109,747 |
McDonald's Corp.
| 1,890 | 392,477 |
McKesson Corp.
| 972 | 130,627 |
Medtronic PLC
| 442 | 43,046 |
Merck & Co., Inc.
| 782 | 65,571 |
MetLife, Inc.
| 1,767 | 87,767 |
Mettler-Toledo International, Inc.(a)
| 27 | 22,680 |
MGM Resorts International
| 3,117 | 89,053 |
Microchip Technology, Inc.
| 691 | 59,910 |
Micron Technology, Inc.(a)
| 1,761 | 67,957 |
Microsoft Corp.
| 1,736 | 232,555 |
Mid-America Apartment Communities, Inc., REIT
| 549 | 64,650 |
Mohawk Industries, Inc.(a)
| 425 | 62,675 |
Molson Coors Brewing Co., Class B
| 2,396 | 134,176 |
Mondelez International, Inc., Class A
| 1,763 | 95,026 |
Monster Beverage Corp.(a)
| 3,164 | 201,958 |
Moody's Corp.
| 269 | 52,538 |
Morgan Stanley
| 4,027 | 176,423 |
Mosaic Co.
| 1,446 | 36,193 |
Motorola Solutions, Inc.
| 1,076 | 179,401 |
MSCI, Inc.
| 219 | 52,295 |
Mylan N.V.(a)
| 15,206 | 289,522 |
Nasdaq, Inc.
| 451 | 43,373 |
National Oilwell Varco, Inc.
| 9,707 | 215,787 |
Nektar Therapeutics(a)
| 1,937 | 68,918 |
NetApp, Inc.
| 2,122 | 130,927 |
Netflix, Inc.(a)
| 127 | 46,650 |
Newell Brands, Inc.
| 6,689 | 103,144 |
Newmont Goldcorp Corp.
| 4,800 | 184,656 |
News Corp., Class A
| 3,645 | 49,171 |
News Corp., Class B
| 3,532 | 49,307 |
NextEra Energy, Inc.
| 312 | 63,916 |
Nielsen Holdings PLC
| 3,739 | 84,501 |
NIKE, Inc., Class B
| 1,240 | 104,098 |
NiSource, Inc.
| 4,500 | 129,600 |
Noble Energy, Inc.
| 4,918 | 110,163 |
Nordstrom, Inc.
| 2,643 | 84,206 |
Norfolk Southern Corp.
| 166 | 33,089 |
Northern Trust Corp.
| 660 | 59,400 |
Northrop Grumman Corp.
| 209 | 67,530 |
Norwegian Cruise Line Holdings Ltd.(a)
| 1,059 | 56,794 |
NRG Energy, Inc.
| 4,960 | 174,195 |
Nucor Corp.
| 3,336 | 183,814 |
NVIDIA Corp.
| 397 | 65,199 |
Occidental Petroleum Corp.
| 787 | 39,570 |
Omnicom Group, Inc.
| 1,086 | 88,998 |
ONEOK, Inc.
| 2,676 | 184,136 |
| Security Description | Shares | Value |
Oracle Corp.
| 2,158 | $122,941 |
O'Reilly Automotive, Inc.(a)
| 200 | 73,864 |
PACCAR, Inc.
| 1,232 | 88,285 |
Packaging Corp. of America
| 452 | 43,085 |
Parker-Hannifin Corp.
| 263 | 44,713 |
Paychex, Inc.
| 995 | 81,879 |
PayPal Holdings, Inc.(a)
| 371 | 42,465 |
Pentair PLC
| 2,422 | 90,098 |
People's United Financial, Inc.
| 10,555 | 177,113 |
PepsiCo, Inc.
| 731 | 95,856 |
PerkinElmer, Inc.
| 928 | 89,404 |
Perrigo Co. PLC
| 5,992 | 285,339 |
Pfizer, Inc.
| 1,513 | 65,543 |
Philip Morris International, Inc.
| 2,515 | 197,503 |
Phillips 66
| 2,267 | 212,055 |
Pinnacle West Capital Corp.
| 483 | 45,445 |
Pioneer Natural Resources Co.
| 274 | 42,158 |
PNC Financial Services Group, Inc.
| 255 | 35,006 |
PPG Industries, Inc.
| 370 | 43,183 |
PPL Corp.
| 1,496 | 46,391 |
Principal Financial Group, Inc.
| 1,028 | 59,542 |
Procter & Gamble Co.
| 1,995 | 218,752 |
Progressive Corp.
| 1,578 | 126,130 |
Prologis, Inc., REIT
| 432 | 34,603 |
Prudential Financial, Inc.
| 869 | 87,769 |
Public Service Enterprise Group, Inc.
| 1,061 | 62,408 |
Public Storage, REIT
| 266 | 63,353 |
PulteGroup, Inc.
| 5,249 | 165,973 |
PVH Corp.
| 735 | 69,560 |
Qorvo, Inc.(a)
| 1,870 | 124,561 |
QUALCOMM, Inc.
| 1,674 | 127,341 |
Quanta Services, Inc.
| 5,135 | 196,106 |
Quest Diagnostics, Inc.
| 569 | 57,930 |
Ralph Lauren Corp.
| 577 | 65,541 |
Raymond James Financial, Inc.
| 298 | 25,196 |
Raytheon Co.
| 365 | 63,466 |
Realty Income Corp. REIT
| 392 | 27,036 |
Red Hat, Inc.(a)
| 1,242 | 233,198 |
Regency Centers Corp. REIT
| 417 | 27,831 |
Regeneron Pharmaceuticals, Inc.(a)
| 212 | 66,356 |
Regions Financial Corp.
| 2,364 | 35,318 |
Republic Services, Inc.
| 1,116 | 96,690 |
ResMed, Inc.
| 730 | 89,082 |
Robert Half International, Inc.
| 1,534 | 87,453 |
Rockwell Automation, Inc.
| 138 | 22,609 |
Rollins, Inc.
| 2,576 | 92,401 |
Roper Technologies, Inc.
| 177 | 64,828 |
Ross Stores, Inc.
| 854 | 84,648 |
Royal Caribbean Cruises Ltd.
| 463 | 56,120 |
S&P Global, Inc.
| 230 | 52,392 |
salesforce.com, Inc.(a)
| 766 | 116,225 |
SBA Communications Corp. REIT
| 152 | 34,176 |
See accompanying notes to financial statements.
4
Syntax Stratified LargeCap ETF
Schedule of Investments (continued)
June 30, 2019 (Unaudited)
| Security Description | Shares | Value |
Schlumberger Ltd.
| 2,701 | $107,338 |
Seagate Technology PLC
| 2,922 | 137,685 |
Sealed Air Corp.
| 973 | 41,625 |
Sempra Energy
| 341 | 46,867 |
Sherwin-Williams Co.
| 91 | 41,704 |
Simon Property Group, Inc., REIT
| 176 | 28,118 |
Skyworks Solutions, Inc.
| 2,402 | 185,603 |
SL Green Realty Corp. REIT
| 394 | 31,666 |
Snap-on, Inc.
| 591 | 97,893 |
Southern Co.
| 846 | 46,767 |
Southwest Airlines Co.
| 1,498 | 76,068 |
Stanley Black & Decker, Inc.
| 686 | 99,202 |
Starbucks Corp.
| 3,072 | 257,526 |
State Street Corp.
| 1,168 | 65,478 |
Stryker Corp.
| 331 | 68,047 |
SunTrust Banks, Inc.
| 534 | 33,562 |
SVB Financial Group(a)
| 527 | 118,359 |
Symantec Corp.
| 5,940 | 129,254 |
Synchrony Financial
| 2,540 | 88,062 |
Synopsys, Inc.(a)
| 1,382 | 177,850 |
Sysco Corp.
| 5,369 | 379,696 |
T Rowe Price Group, Inc.
| 543 | 59,573 |
Take-Two Interactive Software, Inc.(a)
| 1,562 | 177,334 |
Tapestry, Inc.
| 3,503 | 111,150 |
Target Corp.
| 982 | 85,051 |
TE Connectivity Ltd.
| 1,070 | 102,485 |
TechnipFMC PLC
| 4,267 | 110,686 |
Teleflex, Inc.
| 135 | 44,705 |
Texas Instruments, Inc.
| 1,608 | 184,534 |
Textron, Inc.
| 1,744 | 92,502 |
Thermo Fisher Scientific, Inc.
| 302 | 88,691 |
Tiffany & Co.
| 1,137 | 106,469 |
TJX Cos, Inc.
| 1,617 | 85,507 |
Torchmark Corp.
| 967 | 86,508 |
Total System Services, Inc.
| 226 | 28,989 |
Tractor Supply Co.
| 731 | 79,533 |
TransDigm Group, Inc.(a)
| 91 | 44,026 |
Travelers Companies, Inc.
| 1,149 | 171,798 |
TripAdvisor, Inc.(a)
| 1,420 | 65,732 |
Twitter, Inc.(a)
| 1,790 | 62,471 |
Tyson Foods, Inc., Class A
| 3,159 | 255,058 |
UDR, Inc., REIT
| 1,393 | 62,532 |
Ulta Salon Cosmetics & Fragrance, Inc.(a)
| 365 | 126,615 |
Under Armour, Inc., Class A(a)
| 1,912 | 48,469 |
Under Armour, Inc., Class C(a)
| 2,170 | 48,174 |
Union Pacific Corp.
| 194 | 32,807 |
United Continental Holdings, Inc.(a)
| 891 | 78,007 |
United Parcel Service, Inc., Class B
| 637 | 65,783 |
United Rentals, Inc.(a)
| 632 | 83,822 |
United Technologies Corp.
| 516 | 67,183 |
UnitedHealth Group, Inc.
| 562 | 137,134 |
Universal Health Services, Inc., Class B
| 937 | 122,175 |
| Security Description | Shares | Value |
Unum Group
| 2,610 | $87,566 |
US Bancorp
| 655 | 34,322 |
Valero Energy Corp.
| 2,527 | 216,336 |
Varian Medical Systems, Inc.(a)
| 330 | 44,923 |
Ventas, Inc., REIT
| 1,723 | 117,767 |
VeriSign, Inc.(a)
| 630 | 131,771 |
Verisk Analytics, Inc.
| 355 | 51,993 |
Verizon Communications, Inc.
| 2,959 | 169,048 |
Vertex Pharmaceuticals, Inc.(a)
| 380 | 69,684 |
VF Corp.
| 1,483 | 129,540 |
Viacom, Inc., Class B
| 2,934 | 87,639 |
Visa, Inc., Class A
| 169 | 29,330 |
Vornado Realty Trust, REIT
| 521 | 33,396 |
Vulcan Materials Co.
| 650 | 89,252 |
Wabtec Corp.
| 634 | 45,496 |
Walgreens Boots Alliance, Inc.
| 6,564 | 358,854 |
Walmart, Inc.
| 3,558 | 393,123 |
Walt Disney Co.
| 609 | 85,041 |
Waste Management, Inc.
| 847 | 97,718 |
Waters Corp.(a)
| 424 | 91,262 |
WEC Energy Group, Inc.
| 767 | 63,945 |
WellCare Health Plans, Inc.(a)
| 300 | 85,521 |
Wells Fargo & Co.
| 1,891 | 89,482 |
Welltower, Inc., REIT
| 1,398 | 113,979 |
Western Digital Corp.
| 3,560 | 169,278 |
Western Union Co.
| 4,292 | 85,368 |
Westrock Co.
| 1,196 | 43,618 |
Weyerhaeuser Co. REIT
| 3,355 | 88,371 |
Whirlpool Corp.
| 477 | 67,906 |
Williams Companies, Inc.
| 6,391 | 179,204 |
Willis Towers Watson PLC
| 129 | 24,709 |
WW Grainger, Inc.
| 285 | 76,446 |
Wynn Resorts Ltd.
| 746 | 92,497 |
Xcel Energy, Inc.
| 783 | 46,581 |
Xerox Corp.
| 7,517 | 266,177 |
Xilinx, Inc.
| 545 | 64,266 |
Xylem, Inc.
| 1,064 | 88,993 |
Yum! Brands, Inc.
| 3,536 | 391,329 |
Zimmer Biomet Holdings, Inc.
| 551 | 64,875 |
Zions Bancorp NA
| 3,843 | 176,701 |
Zoetis, Inc.
| 584 | 66,278 |
INVESTMENTS IN
COMMON STOCK—99.8%
(Cost $45,199,812)
| | 50,852,112 |
OTHER ASSETS IN EXCESS OF LIABILITIES—0.2%
| | 107,182 |
NET ASSETS—100.0%
| | $50,959,294 |
| (a) | Non-income producing security. |
| NVDR=Non Voting Depositary Receipt |
| PLC=Public Limited Company |
| REIT=Real Estate Investment Trust |
See accompanying notes to financial statements.
5
Syntax Stratified LargeCap ETF
Portfolio Statistics
June 30, 2019 (Unaudited)
INDUSTRY BREAKDOWN
AS OF June 30, 2019*
| INDUSTRY | PERCENTAGE OF
NET ASSETS |
Business Software for Specific Uses
| 3.5% |
Upstream Energy
| 3.3 |
Downstream Energy
| 3.3 |
Branded Pharmaceuticals
| 3.3 |
Restaurants
| 3.1 |
Processed Foods
| 3.0 |
Food Distributors
| 3.0 |
Capital Markets
| 2.3 |
Commercial Insurance
| 2.2 |
Commercial Hardware
| 2.2 |
Electric Regulated
| 2.2 |
Management and IT Services
| 2.2 |
Content Providers
| 2.1 |
Transaction Services
| 2.1 |
End User Hardware
| 2.1 |
Telecommunication Networks
| 2.1 |
Internet Services and Websites
| 2.1 |
Investment Services
| 2.1 |
Operators and Developers
| 2.0 |
Rental
| 1.9 |
Consumer Insurance
| 1.9 |
Electric Competitive
| 1.9 |
Non Real Estate Banking
| 1.9 |
Midstream and Gas
| 1.8 |
Analog and Mixed Signal Integrated Circuits
| 1.7 |
Home Office and Consumer Equipment Manufacture
| 1.6 |
Auto Products
| 1.6 |
Distribution Services
| 1.6 |
Specialty Services
| 1.5 |
Home Office and Consumer Equipment Retail
| 1.5 |
Healthcare Insurance
| 1.5 |
Transportation Services
| 1.5 |
Alcohol and Tobacco
| 1.5 |
Primary Foods
| 1.5 |
Semiconductor Services and Equipment
| 1.4 |
Mechanical Components
| 1.4 |
Healthcare Providers and Facilities
| 1.4 |
Drugstores
| 1.4 |
Personal Products
| 1.3 |
Chemicals
| 1.3 |
Accessories and Footwear
| 1.3 |
Diversified Household and Personal Products
| 1.3 |
Transport Aerospace and Defense Equipment
| 1.2 |
Digital Integrated Circuits
| 1.2 |
Metals
| 1.2 |
Medical Research Services and Equipment
| 1.1 |
Medical Devices
| 1.1 |
Production Equipment
| 1.1 |
Information and Electrical Components
| 1.1 |
| INDUSTRY | PERCENTAGE OF
NET ASSETS |
Industrial Conglomerates
| 1.0% |
Other Natural Resources
| 1.0 |
Diversified Drugs and Devices
| 1.0 |
Healthcare Products Distribution
| 1.0 |
Apparel Retailers
| 1.0 |
Hospital Equipment
| 1.0 |
Branded Apparel
| 0.8 |
Operating Systems and Middleware
| 0.5 |
Consumer Paper Products
| 0.4 |
Business Software for Specific Industries
| 0.2 |
Other Assets in Excess of Liabilities
| 0.2 |
| Total | 100.0% |
* The Fund’s industry breakdown is expressed as a percentage of net assets and may change over time.
See accompanying notes to financial statements.
6
Syntax Stratified LargeCap ETF
Statement of Assets and Liabilities
June 30, 2019 (Unaudited)
| ASSETS | |
Investments in Securities, at value
| $50,852,112 |
Cash
| 71,668 |
Receivable from investment manager
| 72,454 |
Receivable from investments sold
| 128,461 |
Dividends receivable
| 56,237 |
Total Assets
| 51,180,932 |
| LIABILITIES | |
Payable for investments purchased
| 130,180 |
Accrued Management fee
| 18,242 |
Accrued Other fees and expenses
| 73,216 |
Total Liabilities
| 221,638 |
NET ASSETS
| $50,959,294 |
| NET ASSETS CONSISTS OF: | |
Paid in Capital
| 43,417,035 |
Accumulated Gain
| 7,542,259 |
NET ASSETS
| $50,959,294 |
NET ASSET VALUE PER SHARE
| $47.40 |
SHARES OUTSTANDING
| 1,075,000 |
| COST OF INVESTMENTS: | |
Cost of Investments
| $45,199,812 |
See accompanying notes to financial statements.
Syntax Stratified LargeCap ETF
Statement of Operations
| | Since Inception(a)
6/30/19
(Unaudited) |
| INVESTMENT INCOME | |
Dividend income
| $505,669 |
Total Investment Income
| 505,669 |
| EXPENSES | |
Management fee
| 103,690 |
Trustee fee
| 49,311 |
CCO fee
| 24,656 |
Auditor fee
| 17,998 |
Total Expenses
| 195,655 |
Expense Waiver/Reimbursement
| (125,399) |
Net Expenses
| 70,256 |
NET INVESTMENT INCOME (LOSS)
| 435,413 |
| REALIZED AND UNREALIZED GAIN (LOSS) | |
Net realized gain (loss) on Investments
| (534,616) |
Net change in unrealized appreciation/depreciation on Investments
| 7,641,462 |
NET REALIZED AND UNREALIZED GAIN (LOSS)
| 7,106,846 |
NET INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONS
| $7,542,259 |
| (a) | Fund commenced operations on January 2, 2019. |
See accompanying notes to financial statements.
Syntax Stratified LargeCap ETF
Statement of Changes in Net Assets
| | Since Inception(a)
6/30/19
(Unaudited) |
| INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONS: | |
Net investment income (loss)
| $435,413 |
Net realized gain (loss)
| (534,616) |
Net change in unrealized appreciation/depreciation
| 7,641,462 |
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS
| 7,542,259 |
| INCREASE (DECREASE) IN NET ASSETS FROM SHARE TRANSACTIONS: | |
Proceeds from Shares Sold
| 49,557,607 |
Cost of Shares Redeemed
| (6,240,572) |
NET INCREASE (DECREASE) IN NET ASSETS DURING THE PERIOD
| 50,859,294 |
NET ASSETS AT BEGINNING OF PERIOD
| 100,000 |
NET ASSETS AT END OF PERIOD
| $50,959,294 |
| SHARE TRANSACTIONS: | |
Shares sold
| 1,225,000 |
Shares redeemed
| (150,000) |
NET INCREASE
| 1,075,000 |
| (a) | Fund commenced operations on January 2, 2019. |
See accompanying notes to financial statements.
Syntax Stratified LargeCap ETF
Financial Highlights
Selected data for a Share outstanding throughout each period
| | For the
Period
1/2/19 to
6/30/19
(Unaudited) |
Net asset value, beginning of period
| $40.00 |
| Income (loss) from investment operations: | |
Net investment income (loss)(a)
| 0.42 |
Net realized and unrealized gain (loss)
| 6.98 |
Total from investment operations
| 7.40 |
Net asset value, end of period
| $47.40 |
Total return(b)
| 18.51%(c) |
| Ratios and Supplemental Data: | |
Net assets, end of period (000s)
| $50,959 |
| Ratios to average net assets: | |
Total expenses
| 0.84%(d) |
Net expenses(e)
| 0.30%(d) |
Net investment income (loss)(e)
| 1.88%(d) |
Portfolio turnover rate(f)
| 23%(c) |
| (a) | Per Share numbers have been calculated using the average shares method, which more appropriately presents per Share data for the year. |
| (b) | Total return is calculated assuming a purchase of Shares at net asset value per Share on the first day and a sale at net asset value per Share on the last day of each period reported. Distributions are assumed, for the purposes of this calculation, to be reinvested at the net asset value per Share on the respective payment dates of the Fund. Total return for a period of less than one year is not annualized. Broker commission charges are not included in this calculation. Past performance is no guarantee of future results. Performance results do not reflect the deduction of taxes that a shareholder would pay on fund distributions or on the redemption or sale of fund shares. |
| (c) | Not annualized. |
| (d) | Annualized. |
| (e) | Net of expenses waived/reimbursed by the Advisor. |
| (f) | Portfolio turnover rate excludes securities received or delivered from in-kind processing of creations or redemptions of Shares. |
See accompanying notes to financial statements.
Syntax Stratified LargeCap ETF
Notes to Financial Statements
June 30, 2019 (Unaudited)
Note 1—Organization
Syntax ETF Trust (the “Trust”), was organized under the laws of the State of Delaware as a statutory trust on June 27, 2013 pursuant to an Agreement and Declaration of Trust (the “Trust Deed”). Syntax Stratified LargeCap ETF (the “Fund”), is a series of the Trust.
The Fund is registered under the U.S. Investment Company Act of 1940, as amended (the “1940 Act”), as an open-end, diversified management investment company. The Fund has no fixed termination date and will continue unless the Fund is otherwise terminated under the terms of the Trust or unless and until required by law. Syntax Advisors, LLC (the “Advisor” or “Syntax Advisors”), a New York limited liability company, serves as the Fund’s investment adviser.
Investment Objectives:
The Syntax Stratified LargeCap ETF (the “Fund”) seeks to provide investment results that, before expenses, correspond generally to the total return performance of publicly traded equity securities of companies in the Syntax Stratified LargeCap Index (the “Index”).
The Fund’s investment objective is to provide long-term total investment returns (capital gains plus income). To achieve the Fund’s investment objective, the Advisor will seek to track the performance of the Syntax Stratified LargeCap Index, which is a stratified-weight version of the widely used S&P 500® Index. In addition, the Fund may invest in cash and cash equivalents or money market instruments, such as repurchase agreements and money market funds. Refer to the Additional Strategies Information section of the Fund’s prospectus for more information on the methodology of the Syntax Indices.
Note 2—Significant Accounting Policies
The fund is an investment company and accordingly follows the investment company accounting and reporting guidance of the Financial Accounting Standards Board (FASB) Accounting Standards Codification Topic 946 Financial Services – Investment Companies. The accompanying financial statements of the Fund are prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) and in accordance with Accounting Standards Codification (ASC) as set forth by the Financial Accounting Standards Board (“FASB”). The Fund maintains its financial records in U.S. dollars and follows the transferred tax basis of accounting.
In preparing the Fund’s financial statements in accordance with GAAP, estimates or assumptions (which could differ from actual results) may be used that affect reported amounts and disclosures.
The following is a summary of significant accounting policies followed by the Fund.
Tax Free Exchange
The Syntax Stratified LargeCap ETF (the “ETF” or the “Fund”) acquired the assets of the Syntax 500 LP (the “LP”) on January 2, 2019 (the “Transaction”). The Transaction was structured as a tax-free exchange of shares. Accordingly, the Fund has elected to carry forward the historic cost basis of investments and cumulative unrealized gains and losses as reported by the LP prior to the Transaction (the “Election”). Investment companies carry substantially all their assets at fair market value for periodic and ongoing reporting. The primary use of historic cost basis is to determine both realized and unrealized gains and losses.
The ETF’s decision to make the Election was therefore designed to more closely align subsequent reporting of realized gains or losses with actual tax-basis gains distributable to ETF shareholders. The Transaction resulted in initial market value of securities acquired by the ETF of $33,554,470, with a cost basis of $35,543,619 and unrealized loss of $1,989,149.
Syntax Stratified LargeCap ETF
Notes to Financial Statements (continued)
June 30, 2019 (Unaudited)
Note 2—Significant Accounting Policies–(continued)
Investment Valuation
The following methodologies are used to determine the market value or fair value of investments. Equity investments (including preferred stocks and registered investment companies that are exchange-traded funds) traded on a recognized securities exchange for which market quotations are readily available are valued at the last sale price or official closing price, as applicable, on the primary market or exchange on which they trade. Equity investments traded on a recognized exchange for which there were no sales on that day are valued at the last published sale price or at fair value.
Fair Valuation. Investments for which valuations or market quotations are not readily available or are deemed unreliable are valued at fair value using methods determined in good faith by or at the direction of the Trustees of the Fund in a manner that fairly reflects the security’s value, or the amount that the Fund might reasonably expect to receive for the security upon its current sale in the ordinary course. Each such determination is based on a consideration of relevant factors, which are likely to vary from one pricing context to another. These factors may include, but are not limited to, the type of security, the existence of any contractual restrictions on the security’s disposition, the price and extent of public trading in similar securities of the issuer or of comparable companies or entities, quotations or relevant information obtained from broker/dealers or other market participants, information obtained from the issuer, analysts, and/or the appropriate stock exchange (for exchange-traded securities), an analysis of the company’s or entity’s financial condition, and an evaluation of the forces that influence the issuer and the market(s) in which the security is purchased and sold.
Under generally accepted accounting principles for fair value measurements, a three-tier hierarchy to prioritize the assumptions, referred to as inputs, is used in valuation techniques to measure fair value. The three-tier hierarchy of inputs is summarized in the three broad levels listed below.
The three levels of the fair value hierarchy are as follows:
| • | Level 1 — Quoted prices in active markets for identical investments |
| • | Level 2 — Other significant observable inputs (including quoted prices for similar investments, interest rates, prepayment speeds, credit risk, etc.) |
| • | Level 3 — Significant unobservable inputs (including a fund’s own assumptions in determining the fair value of investments) |
The following table summarizes the value of the Fund’s investments according to the fair value hierarchy as of June 30, 2019.
| Description | Level 1—
Quoted
Prices | Level 2—
Other Significant
Observable
Inputs | Level 3—
Significant
Unobservable
Inputs | Total |
| ASSETS: | | | | |
| INVESTMENTS: | | | | |
Common Stock
| $50,852,112 | $— | $— | $50,852,112 |
Federal Income Taxes: It is the Fund’s policy to comply with the requirements of Subchapter M of the Internal Revenue Code applicable to regulated investment companies and to distribute substantially all of its taxable income to its Shareholders. Therefore, no provision for federal income taxes is required. The Fund files tax returns with the U.S. Internal Revenue Service.
Syntax Stratified LargeCap ETF
Notes to Financial Statements (continued)
June 30, 2019 (Unaudited)
Note 2—Significant Accounting Policies–(continued)
Distribution of Income and Gains: The Fund declares and pays dividends annually from net investment income. Net realized gains, if any, are distributed at least annually. Distributions from net realized gains for book purposes may include short-term capital gains, which are included as ordinary income for tax purposes.
Cash: Cash consists of cash held at the Fund’s custodian, State Street Bank and Trust Company.
Investment Transactions and Investment Income: Investment transactions for financial statement purposes are accounted for on a trade date basis. Realized gains and losses on investments sold are determined on the basis of identified cost. Dividend income, if any, is recorded on the ex-dividend date or, in the case of foreign securities, as soon as the Fund is informed of the ex-dividend dates, net of foreign taxes. Interest income, including accretion of discounts and amortization of premiums, is recorded on the accrual basis commencing on the settlement date.
Non-cash dividends received in the form of stock, if any, are recorded as dividend income at fair value. Distributions received by the Fund may include a return of capital that is estimated by the Advisor. Such amounts are recorded as a reduction of the cost of investments or reclassified to capital gains. The Fund may invest in real estate investment trusts (“REITs”) if they are part of the index. REITs determine the characterization of their income annually and may characterize a portion of their distributions as a return of capital or capital gain. The Fund’s policy is to record all REIT distributions as dividend income initially and re-designate the prior calendar year’s return of capital or capital gain distributions at year end.
Organizational and offering costs: Syntax Advisors has agreed to pay all of the Fund’s organizational and offering costs. The organizational and offering costs are not subject to repayment to Syntax Advisors by the Fund.
Distributions
The Fund declares and distributes dividends from net investment income to its holders of Shares ("Shareholders"), if any, annually. Capital gain distributions, if any, are generally declared and paid annually. Additional distributions may be paid by the Fund to avoid imposition of federal income and excise tax on any remaining undistributed net investment income and capital gains. The amount and character of income and gains to be distributed are determined in accordance with federal tax regulations which may differ from net investment income and realized gains recognized for U.S. GAAP purposes.
Federal Income Taxes
For U.S. federal income tax purposes, the Fund has qualified as a “regulated investment company” under Sub-chapter M of the Internal Revenue Code of 1986, as amended (a “RIC”), and intends to continue to qualify as a RIC. As a RIC, the Fund will generally not be subject to U.S. federal income tax for any taxable year on income, including net capital gains, that it distributes to its Shareholders, provided that it distributes on a timely basis at least 90% of its “investment company taxable income” determined prior to the deduction for dividends paid by the Fund (generally, its taxable income other than net capital gain) for such taxable year. In addition, provided that the Fund distributes substantially all of its ordinary income and capital gains during each calendar year, the Fund will not be subject to U.S. federal excise tax. Income and capital gain distributions are determined in accordance with tax regulations which may differ from U.S. GAAP. These book-tax differences are primarily due to differing treatments for expired carry forward losses, in-kind transactions, REITs and losses deferred due to wash sales.
U.S. GAAP requires the evaluation of tax positions taken in the course of preparing the Fund’s tax returns to determine whether the tax positions are “more-likely-than-not” to be sustained by the applicable tax authority. For U.S. GAAP purposes, the Fund recognizes the tax benefits of uncertain tax positions only when the position is more likely than not to be sustained, assuming examination by tax authorities.
Syntax Stratified LargeCap ETF
Notes to Financial Statements (continued)
June 30, 2019 (Unaudited)
Note 2—Significant Accounting Policies–(continued)
The Fund has reviewed its tax positions and has determined that no provision for income tax is required in the Fund’s financial statements. Generally, the Fund’s tax returns for the prior three fiscal years remain subject to examinations by the Fund’s major tax jurisdictions, which include the United States of America, and the State of New York. The Fund recognizes interest and penalties, if any, related to tax liabilities as income tax expense in the Statement of Operations. There were no such expenses for the period ended June 30, 2019.
No income tax returns are currently under examination. The Advisor has analyzed the relevant tax laws and regulations and their application to the Fund’s facts and circumstances and does not believe there are any uncertain tax positions that require recognition of any tax liabilities. Any potential tax liability is also subject to ongoing interpretation of laws by taxing authorities. The tax treatment of the Fund’s investments may change over time based on factors including, but not limited to, new tax laws, regulations and interpretations thereof.
At June 30, 2019, gross unrealized appreciation and gross unrealized depreciation of investment based on cost for federal income tax purposes were as follows:
| | Tax Cost | | Gross
Unrealized
Appreciation | | Gross
Unrealized
Depreciation | | Net Unrealized
Appreciation
(Depreciation) |
Syntax Stratified LargeCap ETF
| $45,199,812 | | $7,050,202 | | $(1,397,902) | | $5,652,300 |
Note 3—Investment Transactions
For the period ended June 30, 2019, the Fund had in-kind contributions, in-kind redemptions, purchases and sales of investment securities of $44,197,447, $1,166,529, $11,876,860 and $11,162,511, respectively. Net realized gain (loss) on investment transaction in the Statement of Operation includes net gains resulting from in-kind transactions of $449,673.
Note 4—Capital Share Transactions
The Fund will issue or redeem capital shares to certain institutional investors (typically market makers or other brokerdealers) on a continuous basis through the Distributor in large blocks of 25,000 capital shares (“Creation Units”). Creation Unit transactions are typically conducted in exchange for the deposit or delivery of a designated portfolio of in-kind securities and/or cash constituting a substantial replication, or a representation, of the securities included in the Syntax Stratified LargeCap Index.
Note 5—Fund Fees and Expenses
Investment Management Fees: The Fund pays the Advisor a unitary management fee at a rate of 0.45% of the Fund’s average daily net assets that is subject to an Expense Limitation Agreement. Syntax Advisors, LLC (“Syntax Advisors”) provides investment advisory, supervisory and administration services under an investment management agreement. The Fund pays a management fee to Syntax Advisors based on daily Average Net Assets (“ANA”) of 0.45%. Syntax Advisors, LLC (the “Adviser”) has agreed to waive its fees and/or absorb expenses of the Fund to ensure that Total Annual Operating Expenses (excluding any (i) interest expense, (ii) taxes, (iii) acquired fund fees and expenses, (iv) brokerage expenses and other expenses (such as stamp taxes) connected with the execution of portfolio transactions or in connection with creation and redemption transactions, (v) expenses associated with shareholder meetings, (vi) compensation and expenses of the Independent Trustees, (vii) compensation and expenses of the Trust’s chief compliance officer and his or her staff, (viii) distribution fees and expenses paid by the Trust under any distribution plan adopted pursuant to Rule 12b-1 under the 1940 Act, (ix) legal fees or expenses in connection with any arbitration, litigation or pending or threatened arbitration or litigation, including any settlements in connection therewith, and (x) extraordinary expenses of the Fund) do not exceed 0.30%. These arrangements cannot be terminated prior to one year from the effective date of the prospectus without the approval of the Board of Trustees. Subject to approval by the Fund’s Board of Trustees, any waiver under the Expense Limitation Agreement is subject to repayment by the Fund within 36
Syntax Stratified LargeCap ETF
Notes to Financial Statements (continued)
June 30, 2019 (Unaudited)
Note 5—Fund Fees and Expenses–(continued)
months following the month in which fees are waived or reimbursed, if the Fund is able to make the payment without exceeding the applicable expense limitation.
Distributor, distribution and service fees: Foreside Fund Services, LLC (“Distributor”) is the Distributor of Fund shares. The Distributor will not distribute Fund shares in less than creation shares and does not maintain a secondary market in Fund shares. The Distributor may enter into selected dealer agreements with other broker-dealers or other qualified financial institutions for the sale of creation units of Fund shares.
The Fund has a distribution and service plan (“Distribution Plan”) pursuant to Rule 12b-1 under the 1940 Act, to which payments at an annual rate of up to 0.25% of the Fund’s average daily net assets may be made for the sale and distribution of its Fund shares. No payments pursuant to the Distribution Plan will be made through at least the next twelve (12) months of operation. Additionally, the implementation of any such payments would be approved by the Board prior to implementation.
Note 6—Indemnifications
In the normal course of business, the Fund enters into contracts that contain a variety of representations and warranties which provide general indemnifications. The Fund’s maximum exposure under these arrangements is unknown, as this would involve future claims that may be made again the Fund that have not yet occurred. However, based on experience and knowledge of management, the Fund expects the risk of loss to be remote.
Note 7—Related Party Transactions
There are no related party transactions during the period except as previously disclosed.
Note 8—Subsequent Events
Management has evaluated the impact of all subsequent events on the Funds through the date on which the financial statements were issued and has determined that there were no subsequent events requiring adjustment or disclosure in the financial statements.
Other information regarding the Fund is available on the Fund’s website at www.syntaxadvisors.com as well as on the website of the Securities and Exchange Commission at www.sec.gov.
Note 9—Market Risk
In the normal course of business, the Fund invests in securities and enters into transactions where risks exist due to fluctuations in the market (market risk). Due to the level of risk associated with certain investments, it is at least reasonably possible that changes in the values of investment securities will occur in the near term and that such changes could materially affect the amounts reported in the financial statements.
An investment in the Fund involves risks similar to those of investing in any fund of equity securities, such as market fluctuations caused by such factors as economic and political developments, changes in interest rates and perceived trends in stock prices. The value of a Share will increase or decline, more or less, in correlation with any increase or decline in value of the holdings of the Syntax Stratified LargeCap Index (the "Index", the "Underlying Index"). The values of equity securities could increase or decline generally or could over or under perform other investments.
Other Risks
Index Risk. Unlike many investment companies, the Fund does not utilize an investing strategy that seeks returns in excess of its Underlying Index. Therefore, the Fund would not necessarily buy or sell a security unless that security is added or removed, respectively, from its Underlying Index, even if that security generally is underperforming.
Syntax Stratified LargeCap ETF
Notes to Financial Statements (continued)
June 30, 2019 (Unaudited)
Note 9—Market Risk–(continued)
Equity Risk. Equity risk is the risk that the value of the securities that the Fund holds will fall due to general market and economic conditions, perceptions regarding the industries in which the issuers of securities the Fund holds participate or factors relating to specific companies in which the Fund invests. For example, an adverse event, such as an unfavorable earnings report, may depress the value of securities the Fund holds; the price of securities may be particularly sensitive to general movements in the stock market; or a drop in the stock market may depress the price of most or all of the securities the Fund holds. In addition, securities of an issuer in the Fund’s portfolio may decline in price if the issuer fails to make anticipated dividend payments because, among other reasons, the issuer of the security experiences a decline in its financial condition.
Non-Correlation Risk. The Fund’s return may not match the return of its Underlying Index for a number of reasons. For example, the Fund incurs operating expenses not applicable to its Underlying Index, and incurs costs in buying and selling securities, especially when rebalancing the Fund’s securities holdings to reflect changes in the composition of its Underlying Index. In addition, the performance of the Fund and its Underlying Index may vary due to asset valuation differences and differences between the Fund’s portfolio and its Underlying Index resulting from legal restrictions, cost or liquidity constraints.
Syntax Stratified LargeCap ETF
Other Information
June 30, 2019 (Unaudited)
Expense Example
As a shareholder of a Fund, you incur two types of costs: (1) transaction costs, including sales charges (loads), if applicable, on purchase payments, reinvested dividends, or other distributions and (2) ongoing costs, including advisory fees and to the extent applicable, distribution (12b-1) and/or service fees; and other Fund expenses. This example is intended to help you understand your ongoing costs (in dollars) of investing in a Fund and to compare these costs with the ongoing costs of investing in other mutual funds. It is based on an investment of $1,000 made at the beginning of the period shown and held for the entire period from January 2, 2019 to June 30, 2019.
The table below illustrates your Fund’s cost in two ways:
Based on actual fund return ——This section helps you to estimate the actual expenses that you paid over the period. The “Ending Account Value” shown is derived from each Fund’s actual return, and the third column shows the dollar amount that would have been paid by an investor who started with $1,000 in the Fund. You may use the information here, together with the amount you invested, to estimate the expenses that you paid over the period. To do so, simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number given for the Fund under the heading “Expenses Paid During Period”.
Based on hypothetical 5% return ——This section is intended to help you compare your Fund’s costs with those of other mutual funds. It assumes that the Funds had a yearly return of 5% before expenses, but that the expense ratio is unchanged. In this case, because the return used is not the Fund’s actual return, the results do not apply to your investment. The example is useful in making comparisons because the SEC requires all mutual funds to calculate expenses based on a 5% return. You can assess your Fund’s costs by comparing this hypothetical example with the hypothetical examples that appear in shareholder reports of other funds.
Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transaction costs, such as sales load charges (loads). Therefore, the hypothetical 5% return section of the table is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transaction costs were included, your costs would have been higher.
| | Actual | | Hypothetical (assuming a 5%
return before expenses) | |
| | Annualized
Expense Ratio | | Ending Account
Value | | Expenses Paid
During Period(a) | | Ending Account
Value | | Expenses Paid
During Period(a) |
Syntax Stratified LargeCap ETF
| 0.30% | | $1,185.10 | | $1.62 | | $1,023.30 | | $1.51 |
| (a) | Expenses are equal to the Fund's annualized net expense ratio multiplied by the average account value of the period, multiplied by 180 and 181 for the Fund and the Hypothetical numbers shown, then divided by 365. |
Syntax Stratified LargeCap ETF
Other Information (continued)
June 30, 2019 (Unaudited)
Premium/Discount Information
Information regarding how often the Shares of each Fund traded on the exchange at a price above (i.e., at a premium) or below (i.e., at a discount) the NAV of the Fund during the past calendar year can be found at www.syntaxadvisors.com.
Proxy Voting Policies and Procedures and Records
A description of the Fund's proxy voting policies and procedures that are used by the Fund's investment adviser to vote proxies relating to the Fund's portfolio of securities are available (i) without charge, upon request by calling 1-866-972-4492 (toll free) or (ii) on the SEC’s website at www.sec.gov. Information regarding how the investment adviser voted for the 12-month period ended June 30, is available by August 31 of each year by calling the same number, on the SEC’s website at www.sec.gov, and on the Fund's website at www.syntaxadvisors.com.
Quarterly Portfolio Schedule
Following the Fund's first and third fiscal quarter-ends, a complete schedule of investments is filed with the SEC as an exhibit on Form N-Q, which can be found on the SEC’s website at www.sec.gov. The Fund's schedule of investments are available upon request, without charge, by calling 1-866-972-4492 (toll free) and on the Funds’ website at www.syntaxadvisors.com.
Syntax Stratified LargeCap ETF
(Unaudited)
Fund Advisor
Syntax Advisors, LLC
110 E. 59th St. 31st Floor
New York, NY 10022
Administrator, Custodian and Transfer Agent
State Street Bank and Trust Company
One Lincoln Street
Boston, MA 02111
Distributor
Foreside Fund Services, LLC
Three Canal Plaza, Suite 100
Portland, ME 04101
Independent Registered Public Accounting Firm
Ernst & Young LLP
200 Claredon Street
Boston, MA 02116
Not applicable for semi-annual reports
| Item 3: | Audit Committee Financial Experts. |
Not applicable for semi-annual reports.
| Item 4: | Principal Accountant Fees and Services. |
Not applicable for semi-annual reports.
| Item 5: | Audit Committee of Listed Registrants. |
Not applicable for semi-annual reports.
| Item 6: | Schedule of Investments. |
| (a) | The schedules of investments are included in the Semi-Annual Report to shareholders filed under Item 1 of this Form N-CSR. |
| Item 7: | Disclosure of Proxy Voting Policies and Procedures for Closed-End Management Investment Companies. |
Not applicable.
| Item 8: | Portfolio Managers of Closed-End Management Investment Companies. |
Not applicable.
| Item 9: | Purchases of Equity Securities by Closed-End Management Investment Company and Affiliated Purchasers. |
Not Applicable
| Item 10: | Submission of Matters to a Vote of Security Holders. |
There have been no material changes to the procedures by which shareholders may recommend nominees to the Registrant’s Board of Trustees that have been implemented since the Registrant last provided disclosure in response to the requirements of this Item.
| Item 11: | Controls and Procedures. |
| (a) | The Registrant’s principal executive officer and principal financial officer evaluated the Registrant’s disclosure controls and procedures within 90 days of this filing and have concluded that the Registrant's disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940, as amended (the “1940 Act”)) are appropriately designed to ensure that information required to be disclosed by the Registrant in the reports that it files on Form N-CSR (a) is accumulated and communicated to Registrant's management, including its principal executive officer and principal financial officer, to allow timely decisions regarding required disclosure, and (b) is recorded, processed, summarized and reported, within the time periods specified in the rules and forms adopted by the U.S. Securities and Exchange Commission. |
| (b) | The Registrant’s principal executive officer and principal financial officer are aware of no change in the Registrant’s internal control over financial reporting that occurred during the Registrant’s most recent fiscal half-year that has materially affected, or is reasonably likely to materially affect, the Registrant’s internal control over financial reporting. |
| Item 12: | Disclosure of Securities Lending Activities for Closed-End Management Investment Companies. |
Not Applicable
| (a)(1) | Any code of ethics, or amendment thereto, that is the subject of the disclosure required by Item 2, to the extent that the registrant intends to satisfy the Item 2 requirements through filing of an exhibit.Not applicable. |
| (a)(2) | Certifications pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.Separate certifications for Registrant's principal executive officer and principal financial officer, as required by Rule 30a-2(a) under the 1940 Act, are attached. |
| (a)(3) | Any written solicitation to purchase securities under Rule 23c 1 under the Act sent or given during the period covered by the report by or on behalf of the registrant to 10 or more persons. Not applicable. |
| (a)(4) | Change in the registrant’s independent public accountant. Not applicable. |
| (b) | Certification pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. A certification for Registrant's principal executive officer and principal financial officer, as required by Rule 30a-2(b) under the 1940 Act, is attached. The certification furnished pursuant to this paragraph is not deemed to be “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, or otherwise subject to liability of that section. Such certification is not deemed to be incorporated by reference into any filing under the Securities Act of 1933 or the Securities Exchange Act of 1934, except to the extent that the Registrant specifically incorporates it by reference. |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
| | Syntax ETF Trust |
| | (Registrant) |
| | |
| | |
| | By: | /s/ Rory Riggs |
| | | Rory Riggs |
| | | CEO |
| | | (Principal Executive Officer) |
| | Date: | September 3, 2019 |
Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated.
| | | | |
| | | | |
| | By: | /s/ Rory Riggs | |
| | | Rory Riggs | |
| | | CEO | |
| | | (Principal Executive Officer) | |
| | Date: | September 3, 2019 | |
| | | | |
| | | | |
| | | | |
| | By: | /s/ Kathy Cuocolo | |
| | | Kathy Cuocolo | |
| | | Treasurer | |
| | | (Principal Financial Officer) | |
| | Date: | September 3, 2019 | |
EXHIBIT INDEX
